ESDM Maintains Coal Production Quota Cut Despite Soaring Prices
Jakarta – Indonesia’s Ministry of Energy and Mineral Resources (ESDM) has maintained its commitment to reduce coal production quotas despite the commodity price surging above US$130 per tonne as a result of the conflict between the United States and Israel with Iran.
“This is a recent development,” said Tri Winarno, Director-General of Minerals and Coal (Minerba), when met at the ESDM Ministry offices on Monday. “We shouldn’t jump to conclusions.”
Coal prices have surged from below US$120 per tonne to exceed US$130 per tonne within approximately a week, driven by the US-Israel conflict with Iran.
Tri stated that the government will prepare anticipatory measures, including allowing coal miners to submit revisions to their 2026 Work and Budget Plans (RKAB), which have already been approved by the government. Miners can submit revisions mid-2026, with coal market demand dynamics serving as a key reference point for such revisions.
“We’ve opened these doors. There’s no need to rush,” Tri said.
The 2026 coal production quota has been set at approximately 600 million tonnes, a reduction of roughly 190 million tonnes compared with 2025’s realisation of 790 million tonnes. The government hopes the production cut will drive higher coal prices on the global market.
Tri was reluctant to make hasty policy decisions, as he fears coal oversupply could occur if quotas are loosened simply because prices have risen over the past week.
“We don’t want to raise production quotas, surge output, and then have prices fall again. We need to find balance,” Tri said.
Regional tensions have escalated since the US and Israel launched large-scale attacks against Iran on 28 February, which have reportedly killed over 1,000 people, including Iran’s Supreme Leader Ali Khamenei, more than 150 schoolgirls, and numerous senior military officials.
Iran has responded with a series of major attacks targeting US military bases, diplomatic facilities, military personnel across the region, and several Israeli cities. These attacks continue to intensify.
On Sunday (8 March), the US and Israel launched air strikes targeting Iranian oil storage facilities in Tehran and surrounding areas, causing severe damage to multiple facilities, including the Shahran Oil Depot. Consequently, global oil prices surged to breach US$100 per barrel.
This price is higher than the average oil price recorded in January 2026, when Brent crude (ICE) was trading at US$64 per barrel and US WTI at US$57.87 per barrel.
Coal prices have also surged as coal serves as an alternative energy source when oil and natural gas face shortages or price spikes due to conflict.